Mozambique blames insurgency for hidden debt

Mozambican Prime Minister Carlos Agostinho do Rosario on Thursday blamed the country's instability for a government decision to hide $1.4bn of debt used to fund maritime security vessels and shipyards.

The International Monetary Fund (IMF) said two weeks ago it had suspended aid to the African nation "pending a full disclosure and assessment of the facts" over the unreported borrowing.

The World Bank and Britain have also frozen funds to Malawi, which relies heavily on foreign donor money.

Mozambique has been beset by tensions between the Renamo opposition group, which waged a 16-year civil war that ended in 1992, and the Frelimo party that has ruled since independence 40 years ago.

Renamo, which refused to accept the results of 2014 elections, holds seats in parliament but also wages an insurgent campaign against the government in central and northern areas.

"We didn't report the debt in due time to our people, our parliament, or even the IMF, as we should have done," Do Rosario told a press conference in Maputo.

The government "should have done better... but the conditions that the country faces are atypical, unique in the world," he said.

"We have an opposition party that seats at the assembly during the day and lead attacks at night."

Clashes between government forces and Renamo have increased since February, with attacks reported almost daily and key roads often closed due to the unrest.

The discovery of oil in 2010 sparked optimistic growth and investment, but the fall in world prices of raw materials saw the local currency, the metical, drop by more than 30% against the US dollar last year.